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Summary of the impact

Sussex research has both contributed to a new phase of EU cohesion policy
and been embodied into several areas of the new Chinese Poverty
Alleviation Strategy. The underpinning research detailed in this case
study includes analysis of the relative economic performance of regional
economies in Europe and of Chinese development and disparities. It led to
the researcher being invited as the only European academic to work on an
EU-China high-level policy dialogue which, in turn, led to a series of
major contributions to policy-focused field research where report
recommendations contributed to policy development in both the EU and
China.

Underpinning research

The underpinning research on `relative regional economic performance' has
been carried out by Sussex Professor Michael Dunford over the past 20
years. The research [see Section 3, R1-R6] has involved the development of
new statistical disaggregations of regional Gross Domestic Product [R3],
has distinguished the roles of productivity and employment, has connected
macro, meso and micro dimensions of industrial and economic change, and
has identified their underlying drivers (including public policy). It
includes the establishment of a Franco-British economic observatory, an
ESRC-funded four-European-Union-country regional economic performance
project — graded outstanding — and a more recent ESRC-funded project on
trade and regional dynamics in the EU and China which highlighted the ways
in which a shift from an export-oriented to a domestic-market-oriented
model and closer urban-rural integration entail a reversal of trends
towards greater inequality [R6].

The research directly led to Dunford being invited by the European Policy
Dialogues Facility as the only European academic to take part in a
high-level EU-China policy dialogue and a key academic in three successive
EU-China high-level seminars and a policy dialogue, where recommendations
— based on findings from underpinning research [R5] — in the final report
were embodied in the new phase of EU cohesion policy [R7]. This
subsequently led to Dunford being invited to take part in a Sino-German
regional policy mission and participation in five projects focused on
poverty alleviation and development in China, where recommendations are
reflected in the policy implemented.

There are two interrelated phases to this work:

Europe

The earlier research explored the relationships between growth and
inequality and interpreted them in terms of differences in regulatory
orders. Generally it showed that, in early phases of rural-urban
transition, development is uneven and often involves increasing regional
disparities. In Europe, a phase of rapid growth in a post-war golden age
was also associated with declining regional and social disparities: in
this phase greater equality contributed to faster growth [R1, R2, R3].
However, the reduction in inequality was reversed after the early 1980s.
At that time it was widely thought that inequality was good for growth,
though Dunford's research consistently questioned this proposition. The
research also showed that relationships between growth and inequality
could differ across different scales of analysis and systems of regional
classification, and drew attention to a range of forces leading to
differentiation and equalisation. The findings highlighted the importance
of distribution and welfare, and questioned some of the criticism of
European cohesion policy on the grounds of the inadequacy of widely-used
estimates of what would have happened in the absence of the policy.

China

In recent research, Dunford has argued that China will entail a similar
transition to Europe, although it depends on significant reforms reshaping
China's development model [R6]. More recent work funded by the ESRC has
been concentrated on the examination, at multiple scales of analysis, of
Chinese development and disparities, with considerable emphasis on the
need to connect macro-trends and micro-foundations. Disparities have been
interpreted/explained in the light of three drivers:

geographical and environmental factors, especially the paucity of
natural resources, restrictions placed on some economic activities to
protect fragile environmental systems and the multiplicity of natural
hazards (floods, droughts, landslides, soil erosion, insect infestations
and wild animals) that threaten livelihoods and render large parts of
China unsuitable for large-scale urbanisation and modern economic
development;

differential rural-urban dynamics; and

China's development strategy choices.

The research showed that each of these drivers is a subject of policy
interventions that are already reflected in quite significant recent
increases in the relative growth of central and western China with, for
example, poverty alleviation measures to promote household development
altering urban-rural relations.

Specific work on Wenchuan [R4] after the 2008 earthquake identified a
forgotten phase in earthquake reconstruction, namely that, in many areas,
recovery of the pre-disaster level of income can take up to a decade. It
pointed to the importance of longer-term economic livelihood
reconstruction, as poor people are more vulnerable and immediate
reconstruction exhausts savings and increases indebtedness. Secondly it
made proposals on the integration of poverty alleviation and regional
development. This work informed Dunford's contribution to the 2011-2020
poverty alleviation strategy for 14 contiguous areas where significant
impact can be demonstrated.

Details of the impact

Dunford's research has contributed to both the development of a new phase
of EU Cohesion policy and Chinese poverty-alleviation policy, the latter
being identified by Chinese Premier Wen Jiabao as one of the government's
top 5 priorities [see Section 5, C5]. The impact described here stems from
an invitation for Dunford to participate in three successive EU-China
high-level seminars and a policy-dialogue project funded by the European
Policy Dialogues Facility involving the European Commission DG REGIO and
the Chinese National Development and Reform Commission. This invitation
was issued based on Dunford's reputation and published work on regional
disparities in the European Union and a number of countries in Western,
Mediterranean and Eastern Europe and on his involvement in work relating
to the design and evaluation of EU cohesion policies. There are two phases
to the impact.

Impact on European regional policy

Dunford's recommendations were embodied in proposals for the future of EU
regional policy 2014-2020. In an email to Dunford, the Director of DG
REGIO confirmed that: `a number of your ideas can be found in the
proposals for the future of EU regional policy in the EU,
2014-2020......you alluded to the need for more priority to be given to
reducing global warming and carbon emissions as well as to strengthening
and exploiting more effectively research endowments. These elements are
right at the heart of the policy for 2014-2020, with a corresponding lower
priority being attached to infrastructure, especially outside the poorest
regions' [C1]. Dunford's contribution to this report was based on his
research on `regional disparities in the European Community' [see Section
3, R1, R5]. He wrote two chapters of the final report of the policy
dialogue on (i) regional definition and classification and (ii) the
allocation of regional finance. The report made proposals for a revised
set of indicators and priorities, a new regional classification and a
system of financial allocation in the EU, including a proposal for
transition(al) areas.

Impact on Chinese poverty alleviation and regional development policy

Recommendations made by Dunford and his collaborator (former Director
General, DG Regio) who worked on field research and the drafting of
reports for the Chinese State Council Leading Group on Poverty Alleviation
(LGOP) [C8] were reflected in the Chinese poverty alleviation strategy for
14 contiguous poor areas. This included research conducted (i) after the
2008 Wenchuan earthquake, and (ii) after the 2010 earthquake in the
Tibetan autonomous Prefecture of Yu Shu. Ideas from Dunford's underpinning
research on Wenchuan [R4] were carried forward into his contribution to
the strategy and planning documents produced for Wuling, which became the
pilot area for the 2011-2020 poverty alleviation strategy focused on 14
`contiguous poor areas', grouping China's poorest regions into 14 larger
macro areas.

This was a programme of national importance. In his November 2012 speech
setting out the government work plan for the last year of his premiership,
Premier Wen Jiabao announced that this programme was one of the five top
priorities. He said: `We will implement the 2011-2020 rural poverty
alleviation and development programme and, in accordance with the new
national standards for poverty alleviation, do a good job of all poverty
alleviation and development work, and step up our work in contiguous areas
with particular difficulties to ensure that people in poverty share more
fruits of reform and development' [C5]. In an email, the former Director
General for DG REGIO confirms the importance of Dunford and Meadow's work
to the Chinese poverty alleviation strategy saying: `It would be boastful,
perhaps, to assert that our work influenced policy in China, since
policy-making is essentially a team effort and ex-post it is difficult to
pinpoint the original source of ideas. But our work was at all times
discussed with policy-makers, did input directly into policy discussions,
and we can see ideas similar to the ones we propounded in final policy
decisions. As a long-time policy-maker myself, I felt that the work that
Professor Dunford and I achieved contributed to policy development' [C2].

Dunford's involvement came about as a direct result of his work on
European regional policy when he was invited to participate in a
Sino-German regional policy mission, followed by five projects involving
the Deutsche Gesellschaft für Internationale Zussammenarbeit (GIZ) [C3]
and the LGOP [C4]. The projects were:

the social impact of the reconstruction plan for Wenchun;

the development of a plan for the reconstruction of Yu Shu;

the Wuling Mountain Area baseline study;

the Wuling Mountain Area study; and

the Wuling Mountain Area plan.

Dunford was involved with Chinese experts in identifying the poverty
situation, the poverty alleviation needs and the impact of past measures
and policy recommendations, and in outlining strategies and plans designed
for the reduction of poverty in these areas. Although the notion of these
areas had been present for some time, it was not acted upon until 2011,
with the design of the strategies and plans for Wuling and the preparatory
baseline study conducted in four provinces. Reports were presented at a
series of workshops with participants from a large number of Chinese
government ministries, the UNDP, the World Bank, the Mercy Corps and other
organisations. Dunford also gave a Plenary Speech at the Fourth ASEAN
Social Forum in Guilin, Guangxi province.

Recommendations from the Wuling strategy and planning documents
that were directly translated into policy

Recommendations made by Dunford and his collaborators and presented in
the final report [C6] were reflected in the final poverty alleviation
programme for the 14 contiguous poor areas. In a press conference speech
made by Mr FAN Xiao Jian, Minister of the State Council Leading Group
Office of Poverty Alleviation and Development, he said: `Since the
beginning of 2009, the State Council Leading Group of Poverty Alleviation
and Development conducted a series of surveys and researches, and put
forward a train of advice for the improvement of poverty reduction
strategy and policy system. In February 2010, after listening to the
report on poverty reduction in its 101st routine meeting, the State
Council decided to formulate the new Outline for the new decade, so as to
usher in a new stage for poverty reduction efforts' [C7].

The recommendation that all ministries should be made accountable for
achieving the general goal of poverty alleviation was implemented into a
system of making a different line ministry responsible for each area.

The recommendation that special attention should be paid to the
co-ordinated development of rural and urban areas to ensure that
development policy enhanced regional integration and helped to reduce
the isolation of poor communities was also referenced specifically by Mr
FAN Xiao Jian, who confirmed that `We will extensively mobilise social
aid into poverty reduction, taking social aid and pairing the more
developed provinces and municipalities in the east with the impoverished
regions in the west as an effective model of our poverty reduction'
[C7].

The recommendation that, in establishing plans for the co-ordinated
development of the 14 areas, attention should be paid to ensure that
their economies offer a diverse range of special activities and income
sources to reduce the vulnerability of certain areas to shocks affecting
highly specialised industries was referenced in the Outline as `State
Council departments, local governments at all levels should increase
co-ordination efforts ... improving production and living conditions,
fostering the growth of a number of industries with local advantages,
accelerate pace of regional infrastructure'.